When Is It Discrimination?:

As a small business owner offering a group health insurance plan, you will need to make sure that you are not using discrimination tactics to block your employees from using the health plan, or to remove them from eligibility from the group health plan.

The following example case studies will highlight discrimination concerns and assist you in determining what is and what is not considered discrimination.

Case Study #1 - A New Hire

You have received an application from a new, prospective employee. This prospective employee has informed you that they are suffering from a pre-existing condition, and that they are interested in joining your group health plan. This means that your premium rates would go up. Although the prospective employee is more than qualified for the job and no other applicants have these qualifications, you refuse to hire them.

Is it discrimination? Yes. You may not make a decision not to hire someone based solely on their health history, pre-existing conditions or likelihood of developing a major illness. Because this applicant was qualified for the job and you could not find a reason other than their health not to hire them, this would be considered discrimination.

Case Study #2 - An Employee Becomes Sick

One of your full-time employees has developed a serious illness that requires extensive medical care. This is creating a burden on your group health plan. You decide to cut this employee's hours to part-time status, thereby removing them from eligibility for your group health plan.

Is it discrimination? Yes. You may not intentionally cut an employee's hours to remove their eligibility for your group health plan. If your employee asked to be cut to lesser hours, this would be different. However, making the decision to cut the hours and not providing any reason for this switch makes this discrimination. If you are faced with this situation, you may not cut hours due to a health problem.

Case Study #3 - An Employee Requests an FMLA

One of your employees has requested a temporary leave of absence, without pay. After three months, you remove them from your group health plan, without offering them notice or any other options.

Is it discrimination? Yes. In addition to discrimination, this also breaks current laws protecting employees who request an unpaid leave of absence. You must provide them with their group health plan throughout their unpaid leave, if they select to keep it.

Case Study #4 - An Applicant Who is a Reservist

An applicant approaches you for a position and reveals that they are currently in the military reserves. This means that if they are called into active duty, you will be required to keep them in your group health plan until they return or until they request to be removed. Based on this information, you select an applicant that is less qualified than the reservist who does not have these requirements.

Is it discrimination? Yes. You are required, under the law, to provide group health insurance to a reservist until they return. You may not use health status or current military service status to reject an applicant that is qualified for a position.

These are just a few examples of how discrimination can creep into the workplace. A good rule to remember is that you can never use health as a qualifier when it comes to hiring someone, or cutting their hours. If you have additional questions on discrimination, you can contact your health insurance representative or your state board of insurance for more information.

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